China’s June consumer inflation misses expectations amid weak demand
CHINA’S consumer prices grew for a fifth month in June but missed expectations, while producer price deflation persisted, as government support measures set a bumpy recovery in motion for the world’s second-largest economy.
Beijing has sought to revive consumption after a stuttering post-Covid recovery but concerns are lingering over more fundamental issues including a protracted housing downturn and job insecurity. That has dented consumer and industrial activity and reinforced calls for more effective policies.
The consumer price index (CPI) in June rose 0.2 per cent from a year earlier, against a 0.3 per cent rise in May, the slowest pace in three months, data from the National Bureau of Statistics (NBS) showed on Wednesday, below a 0.4 per cent increase predicted by economists in a Reuters poll.
“The risk of deflation has not faded in China. Domestic demand remains weak,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management.
Food prices fell even more, despite supply disruptions caused by bad weather, underlining soft demand.
Food prices fell 2.1 per cent year-on-year, compared with a 2 per cent decline in May. Notably, fresh vegetable prices tumbled 7.3 per cent, down from May’s 2.3 per cent reading, and a decline in fresh fruit prices deepened to 8.7 per cent from 6.7 per cent in May.
CPI edged down 0.2 per cent month-on-month, versus a 0.1 per cent drop in May and worsening from an expected 0.1 per cent fall.
The producer price index (PPI) fell 0.8 per cent in June from a year earlier, less than a 1.4 percent decline the previous month, and matched a forecast 0.8 per cent fall. The fall in the PPI was the smallest in 17 months. REUTERS
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